4 Deadlines to Keep in Mind to Give Your 2017 a Financial Boost

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4 Deadlines to Keep in Mind to Give Your 2017 a Financial Boost

Damian Davila for LongLiveYourMoney.com

2017 is just around the corner and many Americans are already thinking about their New Year’s Resolutions. After all, about 45% of Americans usually make New Year’s Resolutions. If you’re among those who are already calling it quits on this year’s money related resolutions and want a fresh start on the ones for next year, then keep in mind the following four deadlines to set yourself up for financial success in 2017.

Deadline #1: In November 2016

One of the key ways to get ready for next year’s taxes is to make use of the IRS Withholding Calculator to figure out whether you have withheld too little or too much so far. Find a copy of your latest pay stub and last year’s return, and visit the website of the IRS Withholding Calculator. After finding out the recommendations from the IRS Withholding Calculator, you’ll be ready to adjust your W-4 form.

There are two reasons for the urgency to update your W-4 form. First, depending on how frequently you get paid, you may only have up to four more paychecks left for the year. Second, many large-sized employers take at least one week to process changes to your W-4. So, if you would like to adjust your withholding for the next couple of paychecks or withhold a bit extra, then you should do it as soon as possible. Some large employers may even delay changes until the next pay period!

Deadline #2: Sometime in November or December 2016

If you lost your job and had such a hard time finding a new one that you had to go without health care coverage for a couple of months, then it may be time to sign up for a plan right away. 

Under the current version of the Affordable Care Act (ACA), anyone with a gap in health coverage of no more than two months can claim an exemption for the fee for not having health insurance in 2016. Under most circumstances, the penalty fee is 1/12 per month of 2.5% of your household income or $695 per adult, whichever is higher. Additionally, you would be responsible for $347.50 per child under 18 in your household who lacks coverage during the same period.

Depending on how many months you have gone without health coverage, you should sign up for coverage on either November or December 2016. That way you’ll prevent a hefty penalty fee (or minimize its impact) on your federal tax return of 2017.

Deadline #3: December 31, 2016

Two important action times are due by the end of the year.

First, the last day of 2016 is the deadline to setup your retirement account so that any contributions made until Tax Day 2017 (Monday April 17, 2017) or the day that you file your federal return, whichever is earlier, count towards your 2016 return. This is critical when you’re expecting a bonus or commission check sometime during the first quarter of 2017. If you decide to sock away part of that check on your retirement account, then you’ll be able to effectively reduce your taxable income for 2016. Talk with your HR department to check on your eligibility to join your workplace’s retirement saving plan before the end of the year.

Second, many workplaces offering a Flexible Spending Account (FSA) set the end of December as the deadline to spend all of the money that you have contributed to the account throughout the year. If that’s your case, use it or it lose it! Make an appointment with your plan’s administrator and find out the applicable rules for your FSA plan. Some employers may allow you to either roll over $500 in FSA cash to use the next year or provide you a grace period of two and half months to use the money. Depending on your situation, it may make more sense to start making pending doctor appointments and drug refills before the end of December.

Deadline #4: January 17, 2017

Last but not least, you may find yourself unable to meet your tax liability for 2016 for a wide variety of reasons. Due to an unexpected, large windfall to a very low level of withholding throughout the year, you could just end up owing a large sum to Uncle Sam on Tax Day. Even when 2016 is already in the books, you still can squeeze one last estimated tax payment for that year using Form 1040-ES.

The deadline to submit the fourth payment voucher from this form is January 17, 2017. Mail this voucher with your check or money order payable to “United States Treasury”. Remember to write your social security number and “2016 Form 1040-ES” on your check or money order. You can find the appropriate mailing address to mail your payment voucher and check or money order on the fourth page of Form 1040-ES.

The Bottom Line

Canadian Prime Minister Pierre Trudeau said it best, “Luck, that's when preparation and opportunity meet”. By preparing for these four upcoming deadlines and taking advantage of these opportunities to improve your financial situation, you’ll have a more “lucky” 2017.

The information contained is intended to be for informational purposes only and should not be relied upon for investment, accounting, legal or tax advice. Please consult your tax advisor for specific tax advice.

Damian Davila is a freelance writer living in sunny Honolulu, Hawaii. He writes about financial topics because he enjoys helping people save money.

Born in Ecuador, Damian has traveled extensively and held positions in Mexico, Germany, Italy and the United States. He has a MBA from the University of Hawaii and a Masters in Educational Technology from a joint program between the Tecnologico de Monterrey and the University of British of Columbia.

Find Damian online at Twitter, and LinkedIn.

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